The MSO Project - June 2019

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BUILD A

CUSTOMER-FIRST CULTURE PAGE 21

ACHIEVE AN

ROI ON GREEN EFFORTS PAGE 18

STREAMLINE

YOUR DELIVERY PROCESS PAGE 25

S T R AT E G I E S A N D I N S P I R AT I O N F O R M S O S U C C E S S

JUNE 2019

Built for

GROWTH The essential fundamentals of sustainable business expansion PAGE 8

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MSO NEWS AND STRATEGIES DELIVERED RIGHT TO YOUR INBOX “Reading FenderBender gives me the ability to see what’s new and trending in our industry without leaving the shop. Some of the best ideas and information are at my fingertips without trying to gather that information myself. I find that this magazine has helped me become more informed and a better shop owner over the years.” —PHIL O’CONNOR, OWNER, POC COLLISION, FIVE LOCATIONS IN MAINE

Grow your repair business with ideas and insights from MSO industry experts. TO SUBSCRIBE FOR FREE TODAY, EMAIL

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THE MSO PROJECT | JUNE 2019


CONTENTS 21

Consistent Shop Processes At Boyce Body Werks locations in Illinois, a focus on streamlined procedures has kept clients happy with repairs.

6

F E AT U R E

Advertiser Index 17

Auto Data Labels

28

Auto Job Central

26

AutoNation

30

Car-O-Liner

22

LAUNCH Tech

3

PPG

2

SATA/Dan-Am

29

Toyota Wholesale Parts

8 | Grow Your Shop

From just starting out to expanding to several locations, there are lessons to be learned in every stage of business ownership.

BUSINESS BUILDING

14 | How I Work: Janel Garis

When it comes to the front office of the shop, remaining meticulously organized is key.

16 | Prioritize Employees’ Health WHO’S BUYING

4 | Acquisitions EDITOR’S LETTER

18 | Go Green

21 | Customer-First Mentality

How to become a shop that prioritizes the customer throughout every step of the repair.

T R E N D S + A N A LY S I S

GROWTH PLAN

6 | Hiring Veterans

25 | Nail the Delivery

Service King reflects on its 500th military veteran hire, as part of its Mission 2 Hire Initiative.

Sponsored by

Simple ways to make a bottom-line impact with environmentally friendly practices.

The stages of business

5 | Everything is a Phase MIKE WHEALAN, GETTY IMAGES

One way to keep employees healthy and happy is by fostering a culture of connection in the shop.

Taking time to review the basics and not skip steps is key to a smooth delivery process.

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WHO’S BUYING

ACQUISITIONS MARCH

FIX AUTO TO EXPAND IN SOUTHERN CALIF. Fix Auto USA has announced continued expansion in southern California with the addition of its newest franchise location, Fix Auto Apple Valley.

CARSTAR OPENS NORTHERN CALIF. LOCATION CARSTAR recently announced the opening of CARSTAR the Professionals Auto Body Works in Modesto, Calif. The owner of CARSTAR the Professionals Auto Body Works, Richard Aleixo, initially entered the industry in a part-time capacity, cleaning his father’s body shop while he was in college. Aleixo eventually worked his way up the shop hierarchy, working as a technician and painter, among other roles, before taking over an ownership role.

GERBER ACQUIRES 11 MICH. LOCATIONS The Boyd Group Inc. recently announced its recent acquisition of a multi-store operation consisting of 11 collision repair locations in Michigan. The repair centers, which previously operated under the names of Dusty’s Collision, Whitney’s Collision, or Wright Brothers Collision, are located in eastern and central Michigan.

1COLLISION ADDS TENTH MINN. LOCATION 1Collision Network shop owner Jerald Stiele has acquired The Collision Center in Golden Valley, Minn. The store is Stiele’s second 6

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location, and the 10th 1Collision affiliated location in Minnesota.

FIX AUTO ADDS FIVE LOCATIONS Fix Auto USA has added five new franchise locations, bringing the total number of locations to 148. The additional locations expand Fix Auto USA’s geographic footprint in multiple markets including: northern California, the greater Phoenix area, and southern California. The new locations include Fix Auto Berkeley, Fix Auto Deer Valley, Fix Auto San Leandro, Fix Auto Scottsdale and Fix Auto Quartz Hill.

GERBER ACQUIRES NEW REPAIR CENTER The Boyd Group has acquired a repair center in Bullhead City, Ariz. The location previously operated as Gordy’s Auto Body, serving Bullhead City for 30 years from the same location. The repair center is located about one hour from the company’s recently opened location in Lake Havasu City and two hours from locations in the Las Vegas market. APRIL

CALIBER BUYS PRICE’S COLLISION CENTERS FOCUS Investment Banking announced that Caliber Collision Centers has acquired Price’s Collision Centers, based out of Nashville. Operating 10 centers in central Tennessee and Kentucky, Price’s has been a collision repair provider for more than three decades. The transaction was led by FOCUS

managing directors David Roberts and Nancy Rolland. After the passing of its owner and CEO, Bobby Price, in 2017, FOCUS was engaged to advise and help restructure the business so it could continue operating successfully. FOCUS helped recruit new COO Marc Sizemore who stabilized operations and led a resurgence in growth.

CARSTAR HAMLIN COLLISION CENTER OPENS CARSTAR Hamlin Collision Center has opened in Rochester Hills, Mich. Having painted his first car at 15, CARSTAR Hamlin Collision Center owner Chris Homrich has been in the collision repair industry for his entire professional life. After vocational school and some time working in-store, he opened his own repair center in 2011.

GERBER ACQUIRES THREE LOCATIONS IN GREATER BUFFALO The Boyd Group and Gerber Collision & Glass recently announced the acquisition of three collision repair facilities, including one intake center, located in western New York state. The shops are all located in the Buffalo area, and are located in Buffalo, Cheektowaga, and East Amherst. The locations previously operated as Carubba Collision, under the ownership of Sam Carubba, for more than four decades. Gerber Collision & Glass previously acquired 18 other repair centers that were branded Carubba Collision and operated by Joe Carubba; those acquisitions took place in March.

REFERRAL COLLISION CENTER OPENS NEW MINN. LOCATION Referral Collision announced the grand opening of a new, second location in Shakopee, Minn. Slated to become the primary repair facility for Referral Collision, the building totals just over 16,000 square feet, has 14 bays and two truck bays. It also has two stateof-the-art paint booths designed to handle vehicles of any size, from consumer cars and trucks, to commercial fleet vehicles and large semi-trucks. Referral Collision’s current location is being renovated and will function as the company’s main customer contact center. It will be called the customer care and detailing center. As part of these changes, Referral Collision is adding automotive detailing to its lineup of services. M AY

BALISE COLLISION REPAIR TO OPEN ANOTHER LOCATION Balise Collision Repair opened a fifth location in May. The new, 10,000-square-foot facility is the group’s third location in Rhode Island. The shop will be geared toward fast-track repairs and exceptional cycle times. Balise Collision Repair in Rhode Island was recently named winner of the Toyota Certified Collision “Shop of the Year” Triple Crown award for the second consecutive year. The award recognizes the collision repair facility for high standards in customer satisfaction and productivity. The team has been a Toyota Excellence Award winner for four years.


EDITOR’S LETTER

Everything is a Phase

HOW OUR UPS AND DOWNS LEAD TO GREATER GROWTH It’s easy to take certain things for granted.

More or less, that’s how the conversation started. I was in the back of an Uber on my way home from the airport last week, when my driver started explaining why he was convinced—100 percent convinced—he’d achieve the goals he has for his life. This is the gist of it: As a Somalian immigrant, he had every disadvantage coming to the U.S. when he was 17. He didn’t speak English, let alone read it. He couldn’t drive a car. He didn’t understand American currency, which at the time didn’t matter because he had no clear path to making any. But then, here he was some five years later—a college student, driving an Uber, ready to graduate and set out on his career path he enthusiastically outlined for me (maybe a little too enthusiastically for late on a Wednesday night?). “The problem is that most people don’t realize that everything is a stage,” he explained; of course, I’m paraphrasing here. “Learning to speak English— now it comes without thinking about it. The first time I drove a car, I was terrified. Now, it comes naturally. “If you understand that nothing comes easily, that you have to work, train and learn to reach every stage in your life, then you can see how to get there.” Our conversation went on like this for the 20 or so minutes it took to reach my driveway, but that’s really the element that stuck with me. And seeing as it’s advice I tend to give often myself, I enjoyed the conversation. Everything is a phase. In this month’s The MSO Project, our main feature, “The Lifecycle of a Shop” (p. 12), takes a look at how MSOs progress through the various stages of growth. It’s rarely an easy path, and it’s never a simple straight line to the destination. And some stages are much more difficult than others. Too often, we can get too caught up in our perceived struggles, worries or fears to see the solutions in front of us. We can’t see past the stage we’re in at that moment. Sometimes, it takes a few simple words—whether from another business operator, or the guy giving you a ride from the airport—to remind us not to take where we are, and our journey to get there, for granted. When we’re able to do that, we can see how we can move past the problems facing us today. After all, we’ve already achieved so much. Everything is a phase. Here’s to the next one.

Bryce Evans, Vice President, Content and Events

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TRENDS+ANALYSIS

Mission Accomplished SERVICE KING’S MISSION 2 HIRE PROJECT HAS LED TO MORE THAN 550 MILITARY VETERANS HIRED SINCE 2015 B Y K E L LY B E AT O N

WHERE ARE WE MISSING THE MARK, IN THE U.S., REGARDING HIRING MILITARY VETERANS?

Luter: Companies think they have to have a major budget in order to drive an initiative of hiring veterans, and that’s not the case. A lot of organizations offer free career fairs. They offer free access to veterans, whether it be people giving time to help them with mock interviews, or a resume review, for instance. 8

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LAKEITRIA LUTER SENIOR MANAGER OF STRATEGIC SOURCING SERVICE KING

IS THE COLLISION REPAIR INDUSTRY MAKING STRIDES WHEN IT COMES TO EMPLOYING MILITARY VETERANS?

Huurman: At the industry level, absolutely. When you look at MSOs in particular, you see a commitment, not only from Service King but from our peers. I recognize the efforts of everyone in the industry to really advance this cause. I’m excited to see everything that folks are doing to help our veterans make the transition.

SEAN HUURMAN CHIEF HUMAN RESOURCES OFFICER SERVICE KING

COURTESY SERVICE KING, GETTY IMAGES

Service King’s hiring processes have gone rather smoothly in recent years. One major reason for that: the MSO’s Mission 2 Hire initiative, which, since 2015, has led to more than 550 military veterans hired in collision repair roles. Whether those military veterans have been hired as service advisors, general managers, or as directors of operation, they typically deliver. Lakeitria Luter, Service King’s senior manager of strategic sourcing, praises those veterans for their dependability, and their ability to adapt, if necessary, amid evolving workloads. “And, most importantly, they see the vision, and how to connect the dots, in order to bring the team along,” Luter adds. “They’re focused, and achievement-oriented. They want to continue to grow within the company.” According to the Veterans’ Employment and Training Service, as of spring of 2019, the overall unemployment rate in the U.S. was 3.8 percent; for veterans, that number is just 2.9 percent. However, while those figures sound relatively encouraging, the United States Department of Labor also reported that there were 326,000 total unemployed veterans in 2018. And that number doesn’t sit well with executives at Service King. Luter, along with Sean Huurman—Service King’s chief human resources officer—recently explained their employer’s outlook with regard to hiring military veterans.


Obviously, I’m thrilled with what Service King has been able to do. We’re on a pace where we’re hiring well over 100 veterans per year. We have dedicated recruiting resources that are focused on the specific processes to bring veterans on board, but also responsible for building relationships throughout the military communities and government agencies to be able to create pipelines for us.

WHAT WERE THE KEY STEPS SERVICE KING TOOK TO HIRE SO MANY VETERANS?

Luter: The Department of Labor has been a huge partnership for us. And, another sourcing channel that we’ve been able to really build upon is the Military Spouse Employment Partnership; we’ve been partners since October 2015. Also, Hiring Our Heroes, which is through the U.S. Chamber of Commerce. So, we’re able to leverage career fairs throughout the United States, where we can find veterans, as well as military spouses. They’ve also provided us with various channels of sourcing, whether it be through LinkedIn, whether it be through them working with our IT department to have all our job openings allocated to their website. One more recent event that we’ve been able to participate in was a mission to hire in Puerto Rico. We were able to get an opportunity to recruit high school students, and veterans, to bring them back to the States in order to gain employment.

WHAT TIPS WOULD YOU OFFER OTHER MSO OPERATORS WHO ARE LOOKING TO HIRE MILITARY VETERANS?

Huurman: It can be intimidating, in terms of figuring out where to start. What we found, through our relationship with the Department of Labor, is that the number of organizations that are out there supporting veterans and that are looking to partner with employers is massive. So, it’s simply uncovering and finding those relationships with organizations whose sole intent is to help place veterans or transitioning military, and just being able to get on their radar screen. JUNE 2019 | THE MSO PROJECT

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The

LI F E CYC LE OF A SHOP D I S C O V E R W H AT E A C H S TA G E O F O W N I N G A N M SO E N CO M PA S S E S , FRO M B U D G E TI N G FINANCES TO GROW TH BY MELISSA STEINKEN

You’ve likely sat in class before and been taught lessons about nature. Here, for instance, is how a seed grows into roots and eventually grows a trunk, branches and leaves, and so on. A monarch butterfly’s journey begins with eggs and turns into a caterpillar. Eventually, the caterpillar becomes a cocoon with pupae and pupae turns into a butterfly—in the end leaving its cocoon behind. Those organisms are not alone in experiencing complex life cycles. In fact, your body shop is in the process of its own life cycle. Life cycles can be simple, in which a body shop owner builds a shop from the ground up and then retires, passing the one location to a family member or buyer. Or, body shop life cycles can become more complex, morphing from one shop to multiple

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locations and experiencing growth that’s largely determined by the surrounding environment. In the collision repair industry, consolidation has increased steadily in recent years. On Oct. 26, 2018, California MSO Cooks Collisions’ assets were officially sold to Abra Auto Body & Glass; it was considered one of the biggest acquisitions of the year within the industry. ABRA was left with 396 U.S. locations. Barely a month later, ABRA merged with fellow consolidator, Caliber Collision, leaving the Caliber brand with over 1,000 stores. While consolidation is impacting the industry, shops at different life stages are able to stay successful. Here’s a look at the stages of opening a shop and then the next steps in growing into multiple locations.


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THE LIFE CYCLE OF A SHOP

SHOPS

Maaco franchise in Chesapeake, Va.

Katie Inge is part owner of one Maaco franchise. She bought the business from her father in 2015 and was only 22 years old at the time. Now, she runs the day-to-day business with her father coming in to help a few days per week. Her shop is 12,000 square feet.

12

Maryland Collision Center (five locations in Md.)

Jim, Shane and Jimmy Mudgett are business partners and part owners of Maryland Collision Center. Jim Mudgett branched off from another shop in 2014 and opened this shop with his two sons, Shane and Jimmy. Jimmy Mudgett came into the industry with a business degree in marketing and management. Three of the shop’s locations are located in the Baltimore area and are roughly 15 miles from each other. Another location is 25 minutes south of those three stores and the final location is an hour away in Frederick, Md.

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Doug’s Place (two locations in Edmonton, Alta.)

Jack De Sena is co-owner for Doug’s Place, a collision repair shop located in Canada. He’s been with Doug’s Place since 1992 and currently acts as a director of fixed operations for the business. The shop has thrived in Alberta largely through OEM certifications.

Stage 1: Making a Name with One Shop

Katie Inge is the shop manager and owner of one Maaco location in Chesapeake, Va., a part of the overarching Maaco franchise that has over 500 total locations. Inge grew up in her father’s shop, which he opened as a Maaco location in 1983. When she reached early adulthood, she bought out her father. Yet, buying out a franchise location is not as easy as Inge might make it seem. She dedicated years to saving money for the plan. Inge purchased a portion of her father’s business when she was 22 years old, in 2015. Growing up, she saved any of her birthday money or money she made while doing chores. It was a constant cycle of saving and not spending. Once she got into the workforce, she took at least 50 percent of each paycheck she received and put it directly into a savings account. In 2015, she purchased 10 percent of the business from her father. She still continues to live off half of her paycheck. Inge says she struggled taking over a business and showing customers her success when the industry is composed predominantly of men. “Even though I knew the industry like the back of my hand, it was difficult at first dealing with customers that wanted to talk

JIM SETZER

THE


THREE WAYS TO FINANCE YOUR EXPANSION Financial Focus Maaco owner Katie Inge saved incrementally over the years to buy a shop from her father.

to my boss or someone older because they assumed I didn’t know what I was talking about,” she says. She had to explain, in extensive detail, how the shop processes worked to customers. Once she took a few extra minutes to walk the shop’s loyal customers around their cars and explain the work that needed to be done, her clientele started to warm up to her.

Stage 2: Building Upon the Core of the Business

Jimmy Mudgett, part-owner of Maryland Collision Center, found a second shop location by keeping an ear out and listening to the news that came from word-of-mouth. People came to Mudgett and his co-owners when they heard the team was sending out inquiries into the market area. Most of the Maryland Collision Centers locations were acquired when news reached Mudgett that a shop was going out of business soon. To make sure the news does reach him, he says he keeps in constant contact with his insurance adjusters, technicians at another company, or other vendors like paint vendors. Despite having their ears open, the team also mailed letters to some local businesses. The letters indicated the team was interested in purchasing a new location in the area and asked for anyone to contact them if they were looking to sell. “We’d get a phone call or two from sending [the letters] out,” Mudgett says. In Canada, Jack De Sena, co-owner of Doug’s Place’s two locations, says the shop was able to expand and thrive by making one important connection: partnering with an OE. “If you’re starting, it’s important to raise the culture of the shop and align yourself with an OEM certification program, “ De Sena says. So, Doug’s Place identifies today as a premier certified collision repair group, and has been that way ever since the team

Matteo Arena, chair and associate professor of finance at Marquette University, offers three ways small businesses can look to expand their business financially. Arena has a Ph.D. in finance and teaches corporate finance at Marquette University.

1. EXPANSION WITH NO OUTSIDE FUNDING.

The ideal way to expand is to do it without seeking outside loans or finances. The best way to expand is to do it when the business generates a strong cash flow.

2. EXPANSION THROUGH A BANK LOAN.

This requires having debt in the company. This is done through acquiring a bank loan. Depending on the business’ standing, the interest rate on a loan can be between 6 percent and 14 percent. Some apps offer ways to get loans now, including LendingTree, which is an online lending exchange that connects small businesses with multiple lenders, banks and credit partners.

3. EXPANSION THROUGH EQUITY.

By expanding through equity, the business owner needs to find an investor for the company. The investor will need some ownership of the company in return. Through an equity infusion of capital, the owner of the shop will not be the sole owner anymore.

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De Sena says his two locations capture more vehicles because his estimators are writing estimates at “the street level.” The team is not waiting to teardown the vehicle and then send the estimate to the customer, but rather brings customers in after an estimate right away. Then the team orders parts so they arrive before the vehicle is checked in for the repair. Vehicles are checked in for their slot, the customer is given a rental car (if necessary), and then the technician begins the teardown process. “This way we’re taking the vehicle off the road, and writing blueprint supplements if we need to,” he says. In order to improve the quality of her shop, Inge and her father added a 45-foot paint booth that can handle large equipment and oversized trucks. In that larger booth, technicians paint multiple bumpers and cars at one time and bring in trucks that the competition could not accommodate. In a regular booth, Inge herself can paint about five bumpers at once and in the truck booth, she can paint 12 bumpers, she says. Mudgett’s shops have production meetings every morning. The front office staff at each location get together and discuss the schedule of vehicles for the day and then create a list that’s handed to each technician. Also, if a repair was missed the previous day, the team notes it on the sheet and then the technicians can make sure to fix it and move the car along. 14

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Stage 3: Choosing to Grow—or Not to

Mudgett’s team is in the process of looking for a sixth location. In late April, the shop finalized the acquisition of Varsity Auto Repair, a 20,000-square-foot facility. That particular store, Mudgett says, was a negotiation that lasted five years. Often, the negotiations can take longer if the owner is uncertain whether to sell or not. Mudgett’s team produced $13 million in annual revenue with just four locations, he says, and the company is tracking to produce nearly $18 million with five locations. “Because of what’s happening in this market, everyone has become a little less risk tolerant to expand,” De Sena says. For his shop’s future, it’s about weighing the pros and cons. If the shop is able to take on more insurance companies and OEM certifications, then he thinks the shop could create enough pressure for growth. Inge has no plans to grow into more than one franchise location. Instead, she says she’d like to focus on improving her current processes in her $2 million shop. “I plan on sticking to my one location right now,” she says. “I’d much rather focus on putting my effort into making this one the best that it can be.”

COURTESY DOUG’S PLACE

became certified through BMW 10 years ago and then followed that with certifications in Tesla, Honda, Kia, Chrysler, Ford and Nissan. The MSO was the first shop to become Tesla certified in Edmonton, De Sena notes.


TIPS FOR BUILDING A LASTING SHOP STRUCTURE Jimmy Mudgett is part owner of his shop. He works alongside a team of two other owners and relies on other general managers in the company. Mudgett shares his tips for building a team structure that expands with the shop as it grows.

T I P N O .1 : C R E AT E A M A N AG E M E N T T E A M T H AT YO U TRUST WITH ALL ASPECTS OF THE BUSINESS .

While Mudgett works alongside two other co-owners, he also knows he can count on two of the company’s general managers. The two general managers are kept in the loop of the company’s plans and daily decisions at all locations instead of just the one each manager primarily oversees.

Certified Success Doug’s Place, a Canadian shop, has received steady work since focusing on OEM certifications.

T I P N O . 2 : F O C U S O N C O M M U N I C AT I N G E F F E C T I V E LY W I T H A L L S TA F F.

Mudgett spends the majority of his time at the shop’s Laurel location. His location is approximately 30,000 square feet and has over 20 employees. In order to communicate with his team, Mudgett will be in group text messages or online chats with them. “It has to operate like a baseball team so if someone hits a ball to third, the third baseman knows to tag the person,” he says. “If a technician is done with a car’s repairs, the painter needs to know right away, so he or she can paint the car.”

T I P N O . 3 : R U N A R E A L LY L E A N S TA F F.

The shop should not be understaffed but the shop should also not be overstaffed, Mudgett says. By keeping the staff at capacity, he says it pushes employees to work harder to meet the end profit. And, an added bonus to keeping a lean staff is that it obviously decreases the company’s payroll.

TIP NO. 4: KEEP AS MANY E XISTING E M P LOY E E S A S P O S S I B L E .

In every store possible that Maryland Collision Centers acquired, Mudgett says the existing staff was kept on. If the existing staff decide to “jump ship,” the company turns to the Laurel location, which acts as a training hub. There is typically at least one employee at that location that is in the midst of being taught each level of the repair and then can be transferred over to a new location.

T I P N O . 5 : T E AC H E M P LOY E E S A S P E C I F I C C U LT U R E .

The “Maryland Collision Center way” is focused on hard work, writing estimates, scheduling and painting cars today not tomorrow, in addition to internal growth. An important part of the shop’s culture centers around helping each employee to grow professionally within the company.

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BUSINESS BUILDING

How I Work: Janel Garis A CUSTOMER SERVICE REP IN PENNSYLVANIA EXPLAINS HOW TO MAKE A FRONT OFFICE EXTREMELY ORGANIZED

Janel Garis spends most of her time in her office, staring at a screen and a stack of papers. Yet, she remains tirelessly motivated, focused on the next step for both her and her co-workers. Garis, a customer service representative for Legacy Autobody Group LLC, which is a franchise partner with CARSTAR in northeast Pennsylvania, says she is able to juggle multiple front office tasks through a refined time management routine. “In order for me to do my job the best that I can, I like to concentrate and not have too many interruptions in my day,” she says. Since starting at the company roughly one year ago, Garis began trying one of her “hats’” at organizing. She brought in colored pens to take notes and switched around a parts filing process when she started. “Janel is always here, always available, and always looking for the next project or task to do,” says Eric Horvath, co-owner of Legacy Autobody Group LLC. Horvath says the body shop is in a time of acquisition, in which the leadership team is looking to expand into a sixth location. Garis has been instrumental in the shop during this time. Garis shares how she stays on top of her ever-changing tasks within the shop. AS TOLD TO MELISSA STEINK EN

I’m the first one in the office at 7:15 a.m. I

come into my office at our Allentown location and I spend about an hour just setting up the office before anyone else is in. I flip the lights on, make a pot of coffee and organize the front desk area for our main point of customer contact, Lydia. Then, I retreat to my office and spend time first thing working on the store’s credit card deposits. I do this for three of our locations including the Allentown one, the Kutztown one and the Quakertown location. The shop uses the CCC into QuickBooks program. If it’s a Monday, then the whole team comes in earlier and we have a morning meeting to discuss which cars are going out that day and which cars will be delivered the following day. A lot of my time in the mornings is spent on the phone. I spend 15 to 30 minutes calling

the banks, our store vendors and customers. I’ll listen to the voice messages we receive 16

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and respond accordingly. I usually call the customer then to give them an update on whether their vehicle is ready to be picked up or when it is scheduled to be done. Our vendors vary for each location so that takes a bit of extra time. I have to make sure that I reach all of the different ones. Sometimes, I can pay a vendor for all three locations in one phone call but other times, I have to make sure I know which vendor is for which store and pay once. These aren’t that bad, though, because often I’ll have to just leave a voicemail for a larger vendor like a dealership and that only takes about one minute of my time. Being organized is the No. 1 piece of advice I can give. In my role, you need to be

organized. As I’m getting older, I can be forgetful. I find having notes on my files and on my desk helps me retain information. Our shop isn’t completely paperless yet and I handle all the mail for this location.

So, I have to be organizing emails, snail mail and my time for helping customers if I need to step in while someone else is away. Some days are so hectic with customers calling and coming into the shop that I don’t get to do accounting work at all. I’ve found that keeping bright colored pens on my desk helps me label something so that whoever I pass it on to knows the note needs to be taken care of in a timely manner. I think it’s important to be aware of time management, as well. Don’t wait until the

last minute to start a task and then not finish it. Don’t start a task at the end of the day and then rush through it to get it done because you’re more likely to make a mistake. As a customer service representative, it’s difficult not to get burnt out after looking at a screen all day and dealing with customers. For me, if it gets to be the end of the day, the clock hits 3:30 p.m. and I still haven’t finished my task, then I will put the paperwork in a stack of manila folders that are in a file rack on my desk. To make sure I know the file isn’t finished, I leave it sticking out of the folder. I can walk in the next day and see right away that I have files to complete when I have a fresh mind in the morning. Then I try to leave the office around 4 p.m. every day. I absolutely love interacting with customers, but in the long-term I’d like to work more on the back end. I’ve been in the cus-

tomer service industry since I was 18 years old. I love being able to talk face-to-face with customers and take something off their shoulders. My biggest feeling of achievement comes from helping make something bad into a better experience for the customer. My boss is slowly introducing me to more of the financial work and the behindthe-scenes work of the business. Eventually, that’s what I’d like to do in my career. I’d like to only handle the office work behind the scenes. Yet, I want to know how to run the front desk if this is the case. I want to be available to help in case someone needs to step away from helping a customer or a teammate calls in sick.


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BUSINESS BUILDING

Initiating a Healthy Work Environment STOP IGNORING THE IMPORTANCE OF HEALTH IN THE WORKPLACE AND TURN YOUR CULTURE AROUND BY MELISSA STEINKEN

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THE MSO PROJECT | JUNE 2019

REMINDER NO. 1: EMPLOYEES WILL SUPPORT WHAT THEY HELP CREATE.

It’s vital for a shop owner to ask what’s important to the employee and ask what they want out of the work that they do, LoVerde says. If a staff wants its work to have meaning, the management team can, in return, offer them matching funds when the team donates to a charity. Leaders should learn more about how stress and environmental factors impact mental health to take preemptive steps to prevent mental health conditions. Gruttadaro says one example of a business incorporating some of these healthy policies is New Brunswick Power. That organization and others that are doing a good job are raising awareness and educating employees about mental health, improving access to services and support and creating a mentally healthy culture, she says.

REMINDER NO. 2: OWNERS NEED TO LISTEN TO AN EMPLOYEE’S NEEDS.

Listen to what the employee wants and then try to accommodate thatneed, LoVerde says. Maybe the employee would like a staggered start to work because he or she stays up late at night. That employee is willing to work into the night but would like to come in later in the day.

GETTY IMAGES

One in 5 adults has a mental health condition, according to Mental Health America. Mental illness can also increase the risk factor for other diseases including HIV, cardiovascular disease and diabetes, according to the World Health Organization. The bottom line is that good mental health can be critical to the overall mental well-being of employees in the workplace. Darcy Gruttadaro, director, Center for Workplace Mental Health with the American Psychiatric Association Foundation, says stress and environmental factors can impact mental health and having poor mental health can in return create a more stressful environment. She says there are three common mistakes workplaces make when it comes to a healthy environment include: • Not recognizing the importance of addressing mental health as part of overall health and wellbeing. • Creating robust workplace wellness programs without including mental health in the overall focus. • Not seeing the connection of stress, loneliness and environmental conditions to employee mental health, overall health and wellbeing. Mental health issues can lead to problems in work quality because employees might miss work and be distracted on the job. As a result, a shop’s productivity might fall and then workplace culture becomes accusatory and blame-driven. The best way to combat this? Create a culture where employees buy in. People thrive when they feel connected to what’s important to them, Mary LoVerde, author and life balance strategist, says. If research shows that employee well-being also drives profits, then a new goal for shop operators should be to encourage mental health awareness and wellbeing in the workplace. Gruttadaro realized when she worked at a law firm with a large healthcare practice and represented a hospital client with a psychiatric unit that there was a tremendous need to address mental health policy issues in the workplace. She says a change to improve access to effective mental health care, end discriminatory practices in health plan coverage and expand the array of effective mental health services available for people who need them is crucial. LoVerde and Gruttadaro share their knowledge for shop owners to take the step into creating a healthy workplace environment. “Leaders set the culture of the shop so it’s extremely important that they understand how to create a healthy work environment,” Gruttadaro says.


10 WARNING SIGNS OF MENTAL HEALTH ISSUES

Gruttadaro also says operators should begin the healthy workplace conversation by explaining to the employee that mental health conditions are common and thus, people don’t always get the help they need. Share the 10 common warning signs of mental health with staff. “This creates a baseline of understanding,” she says. “The shop owner can then stress that if staff are experiencing any of these signs, it is important to get help early.” And, stress that it’s OK to seek help, and in doing so, that the employee will not be negatively impacted in terms of job security.

REMINDER NO. 3: MANAGEMENT CAN VALIDATE THE DATA COLLECTED.

“Ask your staff in more than one way,” LoVerde says. Asking people anonymously might get different answers than if the team was asked about their well-being in the workplace during a circle group. And, LoVerde recommends getting some employee leaders into the mix to help initiate these requests. Sometimes a staff member will be more likely to voice a concern to peers rather than to the leadership team. One employee leader can inquire with the group and then represent the entire group to the owner.

Anonymous surveys, a comment box or some sort of feedback is a good way for leaders to find out what issues their staff would like to address, Gruttadaro says.

REMINDER NO. 4: STAFF NEED TO SEE THE WORKPLACE AS A COMMUNITY.

Stop thinking of work as separate from outside life, LoVerde says. Instead, the work done should be intermixed with some outside life balance and vice versa. “Humans are social beings,” LoVerde says. By building this community, employers are more likely to attract new talent into their shop, she says. Focusing on mental health and health awareness in the work space will set the shop apart from others and be a powerful retention tool against other competition for qualified workers. While Gruttadaro says the Center for Workplace Mental Health is not aware of opportunities for management training on health in the workplace, she says there are programs available and multiple options to fit the specific needs of the shop. For example, the center offers a program called Right Direction, a program for depression awareness and ICU for broader mental health conditions.

There are 10 warning signs of major mental illnesses that, if witnessed in employees, may signal it’s time to intervene, according to the American Psychiatric Association.

1. Dramatic sleep or appetite changes. 2. Rapid or dramatic shifts in emotions or depressed feelings. 3. Loss of interest in social activities and social withdrawal. 4. An unusual drop in functioning at work or social activities by having difficulty performing familiar task. 5. Problems with concentration, memory, logical thought and speech that are hard to explain. 6. A heightened sensitivity to sights, sounds, smells or touch. 7. Loss of initiative or desire to participate in any activity. 8. Feeling disconnected from oneself or one’s surroundings. 9. Illogical thinking, which is unusual or exaggerated beliefs about personal abilities. 10. A fear of others or a strong nervous feeling.

JUNE 2019 | THE MSO PROJECT

19


BUSINESS BUILDING

Environmentally Conscious

A CALIFORNIA BODY SHOP OWNER STAYS ENVIRONMENTALLY FRIENDLY IN HIS SHOP BY MELISSA STEINKEN

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THE MSO PROJECT | JUNE 2019

IN THE TOWN

The three Husteads body shops are located in close proximity to the University of California, Berkeley. The area is specifically one that has a lot of professionals and young college students. The shop itself sees more repeat business than most, he adds. Studying his market has helped Yi learn how to manage waste removal and stay within legal guidelines. The shop is located in an area that often experiences flooding. According to climate.gov, California is one of the states with the highest average percentage of precipitation and is part of the southern states in the U.S. that are projected to have very high temperatures from 2020–2090, based on a highemissions future. For other shops, like CDE Collision Centers, the surrounding environment

GETTY IMAGES

In January, Starbucks and other restaurants in Berkeley, Calif., were required to charge 25 cents for every disposable cup that a consumer purchased. That illustrates the fact that, for businesses in California, like Husteads Auto Body, which has multiple locations, being environmentally conscious is not a choice—it’s a requirement. For more than 19 U.S. cities and counties across the country, they have promised to increase the number of electric vehicles in their own fleets, according to The Guardian. According to the report, moves like electrification are particularly challenging in the U.S. because transport is now the largest contributor of greenhouse gases and drivers have opted for larger vehicles amid low fuel prices. Jonathan Yi, owner of Husteads, notes that his area often experiences natural disasters, too, so it’s important that his shop follows laws on hazardous waste removal, recycled materials, and tries to focus on repairing instead of replacing as much as they can. For Eric Frieberg, director of operations at CDE Collision Centers, the shops’ goal is to be environmentally friendly, specifically with the products that they use throughout the 15 locations. Frieberg operates multiple shops across the Chicagoland, Indiana and Michigan markets. Yi has owned Husteads for over 20 years and, during that time, has used his background in high-tech corporate business to make the shop run smoothly and become departmentalized, he says. One vital piece to running smoothly is designating the areas for hazardous waste and recycled materials, he says. Below, Yi shares how his MSO has become environmentally conscious.


and the recycling company knows exactly where to go when coming to pick up the pieces because the parts never move. “It’s kind of like how you do aluminum in which you section off a part of the shop,” Yi says. “We recycle materials like aluminum cans, parts, shredded paper and cardboard boxes.” Water sumps trap the shop’s debris and waste that can potentially escape. The technicians wear goggles and face masks. They also carry fresh air filters, Yi says. The shop also tracks all the fumes in the air and the usage of liquids and VOCs that are in the air. At the CDE Collision Centers, the team uses vacuum systems when welding and vacuum systems from 3M to keep the dust from going airborne on the shop floor.

IN THE OFFICE

does not experience the same type of natural disasters, with no drought and average temperatures predicted. With fewer weather issues, that shop mainly focused on eco-friendly practices occurring within the paint department.

IN THE PAINT DEPARTMENT

His shop uses waterborne paint, Yi says. The paint comes from PPG, and Yi also makes sure that each technician wears the proper equipment to reduce fumes and keep them safe in the process. Frieberg says CDE locations use Axalta paint and camera-matching systems that help the shops match colors quickly and digitally in order to reduce waste. And, the shops have more efficient spray booths right now. In the paint department, the team uses a vacuum system so paint dust particles

don’t go into the air. And, they sand the bumpers for a recycled finish. Any excess paint the team has goes to use in the door jams and other areas. Overall, the team tries to reduce the amount of liquid that does get picked up. “Any chance we can, we’re trying to make sure we’re conscious of reusing extra materials,” Yi says.

IN THE REPAIR PROCESS

The team reconditions wheels instead of replacing them, Yi says. And, each of the three shop locations contains a designated area on the shop floor in which technicians can put recycled materials to be picked up. The shop recycles materials including cardboard, paper, old metals, aluminum cords, bumper cords and sheet metals. The areas are roughly 800 square feet

“We want to focus on solar resources down the line,” Yi notes. Right now, high-efficiency, motionsensor lights are used in the shop. Frieberg says that, currently, CDE Collision Centers uses Sylvania lowenergy lighting. And, every location is being retrofitted for LED lights. The shop also makes sure to shred any old customer files and recycle them. And, once per year or so, government entities will come out to the shop to inspect that the shop is following OSHA laws, and the rules of the Bay Area Air Quality Management District. Since Husteads is a body shop in California, the shop has to follow regulations to maintain air quality. According to the BAAQMD, air is made up of 78 percent nitrogen, 21 percent oxygen, and less than 1 percent of gasses like argon and carbon dioxide. Some of the toxic materials in the air can come from fumes that the body shop produces. JUNE 2019 | THE MSO PROJECT

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THE MSO PROJECT | JUNE 2019


BUSINESS BUILDING

Consistent Communication Kyle Boyce, right, works in concert with coworkers to keep clients informed of the repair processes at Boyce Body Werks near Chicago.

Constructing a Customer-First Shop

MIKE WHEALAN

THE KEYS TO DELIVERING A SERVICE EXPERIENCE THAT DOESN’T IGNORE THE CUSTOMER Kyle Boyce has worked at Boyce Body Werks since he was a young boy. His father opened the shop in 1985, and now Boyce has grown to transition into a leader of the facility. He’s not only the general manager of the Batavia, Ill., location, but also helps oversee the business’ other location in Naperville, Ill. Boyce has worked in more than one department of the shop, including paint, prepping, and the parts department; throughout his career, he’s worked in nine total shop positions. Today, both of his parents are taking a step back from the business and Boyce runs more than just the one location, ultimately taking on a role that oversees the finances and shop customers. The shop is primarily non-DRP related, Boyce says, which helps with the consolidation occurring in the rest of the industry. Even just five years ago, the industry was different and the shop was smaller, he notes. Now, there is more overhead and positions open, like a designated employee for scanning. In light of the industry shifts, Boyce says his team has been working and more focused than ever before on informing customers about repairs. Boyce outlines what the shop does to deliver exemplary customer service in every aspect of the repair.

KYLE BOYCE GENERAL MANAGER BOYCE BODY WERKS

AS TOLD TO MELISSA STEINK EN

JUNE 2019 | THE MSO PROJECT

23


BUSINESS BUILDING

Boyce Body Werks Locations:

Naperville, Ill. and Batavia, Ill. Size:

17,000 square feet (Batavia) Staff:

(Batavia location): 4 body technicians, 4 paint technicians, 8 in the front office Monthly Car Count:

220

Annual Revenue:

$6.6 million (total)

CUSTOMER GREETINGS

At our shop, every customer is greeted by a customer service representative. From there, the customer’s car is taken to an estimating bay in the shop which can fit four to five cars. We have garage doors that separate the noisy area of the body shop from the area that a customer waits in, which makes the experience a lot more quiet and pleasant for him or her. The north half of the building is where the body technicians, and bays and frame racks, are located. The south side of the building is where our paint department is, including the two paint booths, a downdraft booth and more. Since we don’t focus on DRPs, we focus on the customer-pay work as one way to get more work in the shop. We typically do more customer-pay work on newer vehicles. Our technicians repair mostly Hondas, Lexuses, Toyotas and Volkswagens and take in more customer-pay work when repairing smaller jobs, like bumper repairs. 24

THE MSO PROJECT | JUNE 2019

MIKE WHEALAN

CUSTOMER PAY


The smallest bumper repair, like replacing the bumper cover, could only cost as low as $800. Customers are surprised that their cars are becoming cheaper to repair.

CUSTOMER INSURANCE

We have only one DRP at our Batavia location. We have no DRPs at the Naperville location. In order to supplement work, the shop partners with dealerships. Not only does the shop work with dealerships to build the referral network, but this also helps us with the overall quality of the repair that we’re delivering to the customer. Overall, everyone here is spending more time on the administration side to research OEM repair procedures and perform vehicle scans. And, a lot of OEMs are doing a great job of making us aware of areas we need to focus on in the repair, which helps as a smaller MSO.

CUSTOMER COMMUNITY

In Dec. 2018 we signed up to participate in the Recycled Rides program. After attending some of our business council meetings, we heard that it was a good idea to participate in the program. Right now, we typically volunteer with charities around our area and do charity work for local charities like the United Way of Illinois. I’m also on the board for the Batavia Main Street and we’re looking to get involved even more.

CUSTOMER MARKET

Outpacing Competitors General manager Kyle Boyce, far left, leads a Chicago-area shop that has such a steady stream of repair work that it doesn’t need to concern itself with marketing.

Our Batavia shop, where I’m primarily at, is located in a suburb of Chicago, home to 30,000 people and roughly 15 minutes away from the second location in Naperville. We’re in a diverse market area. We’ve definitely been lucky that within the past five years or so, customers have come to the shop after seeing it advertised on Facebook or simply by being referred by friends or family. Right now, we don’t have a marketing budget because we are still working through a backlog of work. I think because we’ve focused on customer service and participated in the community, we’ve created a positive name for ourselves. JUNE 2019 | THE MSO PROJECT

25


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DJ MITCHELL GROW TH PL AN

Don’t Fumble the Delivery HOW TO ENSURE A SUCCESSFUL END TO A REPAIR JOB B Y DJ M I T C H E L L

GETTY IMAGES

Last time, we discussed the first part of the

concept of doing more with less. This month, we’ll dig further into that concept, starting after the car gets out of paint. It’s Friday afternoon now, and the car is sitting in the detail bay getting washed up. We could get the latest and greatest products that are auto diluted on a rack for us to save us time and money, or hire a detail contractor for the position since detailers are unreliable and they don’t want to work as it is. I even know of shops that take the nice ones up the street to the detail shop because they don’t trust the detail department.

My recommendation is let’s try to cut down on our mess as it is. Do not put parts in the car, tape up any openings, and try to keep the vehicle clean as we go. Then, hire a detailer and let them know how important their job really is. The first thing that gets noticed is how clean the car is and how much it sings. We can install a quarter panel using the most expensive welder by the best technicians, then have the best spray gun this side of the mountains spray it with the finest basecoat and high solids clear, but, if that quarter glass has fingerprints on it, or we left the old clips

sitting on the floor board, that job just went from perfect to not acceptable in the blink of an eye. Get a clean, well lit area, and wash that vehicle top to bottom: get the jambs, the trunk, and under the hood. Then when you drive it around the front keep a chamois with you to wipe off the water spots that drip. Our customer, Ms. Smith, is now on her way to pick up the vehicle. We could give the car back to our intake and delivery department to nail the customer service portion. We could hang the old rearview mirror tag that says “Your business matters to us.” We could have the manager walk out and JUNE 2019 | THE MSO PROJECT

27


DJMITCHELL / GROWTH PLAN

It’s so easy today to get lost in what’s next or what’s the greatest. But these things should be in addition to your basics, not in lieu of them. Greet customers with respect; set expectations, write a fair and accurate repair order; explain it to the technician and set your expectations there; order your parts properly, check them in and mirror match them; watch quality all

the way, and don’t wait for the customer to QC it at pick-up; schedule a delivery time; then deliver the car back to them. It’s rude to hand them the keys and let them go find their car. Don’t get blinded by things. Sticking with the basics and doing things right will let you compete with, and outperform, almost anybody.

DJ MITCHELL is the regional director for Joe Hudson’s Collision, formerly Car Guys Collision Repair, a regional MSO located in Florida. He also hosts a podcast for FenderBender’s The MSO Project. E M A I L : D J M I T C H E L L @J H C C . C O M COURTESY DJ MITCHELL

deliver each one. We could set up an inside delivery bay with a coffee bar, shiny floors and company banners hung everywhere. But if we don’t do the basics all the way though none of this will matter. Schedule a delivery time. Don’t just ask them to show up. That way, we are able to go help them and not be with someone already. Re-explain the repair to them; don’t let them try to decipher the estimate. They don’t know what R/I means. If it says “R/I bumper,” many customers assume you replaced or fixed their bumpers. Walk around the car and show them what you did and how great it looks. Explain to avoid machine car washes for a while, and show them how great the detail looks too. Tell them you hope you never see them again (yes, it is cheesy, but it works—trust me). And please, for the love of collision repair, know where the money is coming from before you deliver that car.

THE TECHNICIAN SHORTAGE W IL L N OT D E FE AT U S

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